"When during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property, he may spend such money as is necessary

(r) Moore v. Shelley, 1883, 8 App. Cas. 285; Bagnall v. Villar, 1879, 12 Ch.D. 812.

(s) Cameron v. Gibson, 1889, 17 O.R. 233.

(t) Bloomfield v. Hellyer, 1895, 22 O.A.R. 232; Laing v. Ontario Loan and Savings Co., 1881, 46 U.C.R. 114.

(u) Cook v. Thomas, 1876, 24 W.R. 427; Chaplin v. Young (no. 1), 1864, 33 Beav. 330; Wragg v. Denham, 1836, 2 Y. & C. Ex. 117.

(v) Burton Boulton and Hayward v. Bull, [18951 1 Q.B. 276.

(a) For the due management of the property and the collection of the rents and profits thereof;

(b) For its preservation from destruction, forfeiture or sale;

(c) For supporting the mortgagor's title to the property;

(d) For making his own title thereto good against the mortgagor;

(e) When the mortgaged property is a renewable leasehold, for the renewal of the lease; and may, in the absence of a contract to the contrary, add such money to the principal money," with interest (w). In Ontario it is provided by rule 410 that under an order of reference, the master may take into account necessary repairs, and lasting improvements, and costs and other expenses properly incurred otherwise, or claimed to be so (x).

A mortgagee in possession is entitled to credit in his account of rents and profits for payments properly made for purposes incident to his possession (y). In the case of substantial repairs and improvements, the mortgagee, in order to entitle himself to reimbursement for money expended by him must establish either that the mortgagor agreed to the expenditure of the money (whether expressly or, after notice, by acts denoting acquiescence), or that the outlay was a reasonable one increasing the selling value of the property or necessary for the purpose of keeping the property in a proper state of repair (z).

(w). Indian Transfer of Property Act, 1882, s. 72, quoted in appendix III. to Strahan, Law of Mortgages, 2nd ed., pp. 228-9. As to interest on money expended by the mortgagee, see Eyre v. Hughes, 1876, 2 Ch.D. 148, at pp. 163-4, 18 R.C. 385, at pp. 398-400.

(x) The whole rule is quoted in chapter 27, Accounting between Mortgagor and Mortgagee, Sec. 293.

(y) White v. City of London Brewery Co., 1889, 42 Ch.D. 237.

(z) Sandon v. Hooper, 1843, 6 Beav. 246; Paul v. Johnson, 1866, 12 Gr. 474; Shepard v. Jones, 1882, 21 Ch.D. 469; Henderson v. Astreceived, or an occupation rent, if in actual possession, not with such rents as might have been received; and the court also allowed him for repairs and permanent improvements (d).

Where the mortgagee in possession had planted fruit and ornamental trees suitable for carrying out improvements commenced by the mortgagor, he was allowed the cost price of the same and a reasonable amount for care and cultivation, but not the value thereof at the time of redemption (a). A mortgagee in possession of a grist mill and other property erected a carding and fulling mill. This was disallowed to him as being an improvement that a mortgagee could not make without consent (b).

In a case where the mortgagors released their equity of redemption to the mortgagee, and the mortgagee subsequently signed a memorandum agreeing to reconvey upon being paid principal and interest and all costs of improvements made by her, it was held in a suit for redemption that the mortgagee was entitled to recover for all permanent and lasting improvements, even although the estate might not have been increased in value to an amount equal to the sum expended thereon (c).

The owner of certain lands after a treaty for a loan thereon conveyed the lands absolutely to the person making the loan and received back a bond conditioned to reconvey the property on payment of a certain sum at the end of two years. Default was made in such payment. The court declared the deed to have been made as security only, the bond to reconvey containing an undertaking by the vendor to pay the stipulated amount, and it appearing that the value of the property greatly exceeded the sum paid for the alleged purchase thereof; but under the circumstances the court charged the mortgagee with such rents and profits as were actually wood, [1894] A.C. 150; Waterloo Manufacturing Co. v. Holland, 1917, 10 S.L.R. 300, 36 D.L.R. 216; Laws v. Toronto General Trusts Corporation, 1904, 8 O.L.R. 522.

(a) Paul v. Johnson, 1866, 12 Gr. 474.

(b) Kerby v. Kerby, 1856, 5 Gr. 587; Manitoba Lumber Co. v. Emerson, 1913, 18 B.C.R. 96, 14 D.L.R. 390.

(c) Brotherton v. Hetherington, 1876, 23 Gr. 187.

Where a mortgagee is charged with rents and profits received from improvements made by himself he should be allowed the expense of such improvements to a corresponding amount (e).

Improvements made under the belief of absolute ownership are allowed more liberally than to a person who makes improvements knowing that he is but a mortgagee (f).

Where it is found that the mortgagee in possession on taking his accounts has suffered a loss by reason of the rents not being sufficient to pay the expenses of management, he is entitled to be allowed out of the proceeds of the sale of the property what he has lost (g).

In taking the account in the master's office the plaintiff as assignee of the mortgage claimed to be entitled to moneys paid by the mortgagee to redeem the mortgaged lands which had been sold for arrears of taxes. It was held that money so paid was a lien on the land, and the mortgagee had a right to claim the same as a just allowance, with interest from the date of payment (Ji).

A second mortgagee in possession will not be allowed for improvements as against a first mortgagee (i).

If the mortgagee appoints a receiver in circumstances which render the appointment justifiable, he will be allowed in his accounts the remuneration and proper expenses of such receiver (j).

(d) Bullen v. Renwick, 1862, 9 Gr. 202.

(e) Constable v. Guest, 1858, 6 Gr. 510; cf. Patterson v. Dart, 1911, 24 O.L.R. 609.

(f) Carroll v. Robertson, 1868, 15 Gr. 173; McLaren v. Fraser, 1870, 17 Gr. 567; see, however, Patterson v. Dart, 24 O.L.R. 609, at p. 620.

(g) Bompas v. King, 1886, 33 Ch.D. 279; Rice v. George, 1872, 19 Gr. 174.

(h) Wiley v. Ledyard, 1883, 10 O.P.R. 182.

(i) Landowners, etc., Co. v. Ashford, 1880, 16 Ch.D. 412.